It appears that the US is entering the slowdown phase of the economic cycle. But what might that mean for returns across asset classes? And can a recession be avoided?
Evidence is accumulating that the market leadership of growth stocks is now fracturing. If true, it could herald a dramatic reversal in many of the trends of recent years.
Investors are mostly optimistic and seemingly confident of sizable future gains, in spite of historically unfavourable valuations and a number of other risks that are re-emerging.
The current US economic expansion ranks as the third longest on record and markets seem content to assume it will continue indefinitely. We see scope for growing inflationary forces to surprise markets and precipitate disruption.
We examine some of the potential consequences for markets when the Fed removes the punchbowl of QE. Will it be as boring a process as Janet Yellen hopes?
We look at the challenge and importance of emphasising capital preservation over capital growth as market risks build.